Power Grid Corporation of India Limited is India’s largest electric power transmission company and a Maharatna PSU company with a 51.34% stake GOI in the company. It was incorporated in 1989 primarily to set up extra-high voltage alternating current and high-voltage direct current (HVDC) transmission lines.It is currently engaged in planning, implementation, operation, and maintenance of Inter-State Transmission System (ISTS), Telecom and consultancy services.

The company owns 85% of interstate transmission networks through Transmission assets spreaded across India which is covered by 1,77,790 ckms of Transmission lines and 1507 in nos through 278 substations and 528761 MVA capacity. It has IR capacity of 99850 MW which comprises 84% of total IR. It transmits 45% of power generated in India through 18 HVDC Sub stations, 62 765Kv Substations, 100 400Kv Substations, 20 SVC/Satcoms, 63 GIS Substations, more than 2,90,000 Transmission towers and more than 3800 transformers and rectifiers.

Under its Consultancy business, company global footprints of 23+ countries and have consulted 150+Domestic Clientswhich includes various government agencies like NHAI and departments, CPSEs, state, and private power utilities and the Indian Railways and other government entities like and state departments.On international front company 25+ Global Client with presence in countries of Asia, Africa, CIS countries, and AsiaPacific by providing Consultancy, Project Management, and Asset Management Services to various clients which
include state-owned power utilities, multilateral funding agencies like World Bank & ADB, IFC, and Govt. of India.

Under its TELECOM business company owns and operates 100,000 kmof Telecom Network.Company has Points of Presence in 458 locations & Points of Interconnections in 780 locations along with Intra City network in 256 cities across India.The spare capacity of the telecom infrastructure so available is being utilized for providing commercial telecom services to various customers inter alia including telecom service providers, IT companies, Govt. Deptts., PSUs, State Govts., Defense establishments etc.

Company is also promoting e-mobility by adopting Electric Vehicles (EV) for its own use and by installing fast EV charging stations across the country. The Company has set up 11 EV fast charging stations and it operates 16 public EV charging stations at Delhi, Gurugram, Hyderabad, Ahmedabad, Bengaluru, Kochi & Kozhikode. Work on additional 24 public EV charging stations is in progress in Delhi, Bengaluru, Mysuru and Shillong and it is also developing 11 EV charging stations in Shillong under Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) India scheme phase II. Company is also in advance stage o discussions with various Municipal Corporations, DISCOMs, Metro Rail Authorities etc. for expanding Energy Vehicle Charging Station network.

Fundamentals:

Financial Results:

Company’s Net Sales was at Rs 11,006.18 crore in June 2024 down by 0.38% from Rs. 11,048.13 crore in June 2023. Its Quarterly Net Profit was at Rs. 3,723.92 crore in June 2024 up 3.52% from Rs. 3,597.16 crore in June 2023. Company’s EBITDA stands at Rs. 9,875.88 crore in June 2024 down 0.16% from Rs. 9,892.07 crore in June 2023.

During Q1FY25, the Company incurred a Capital Expenditure of ₹ 4,615 crore and capitalized assets worth ₹ 2,320 crore (excluding FERV) on consolidated basis.The total transmission assets of POWERGRID and its subsidiaries stood at 1,77,790 CKM of transmission lines, 278 substations strategically placed across the country and 5,28,761 MVA of transformation capacity. POWERGRID maintained average transmission system availability of 99.80% during Q1FY25.

Key Updates:

1. POWERGRID has recently acquired a Project Special Purpose Vehicle (SPV) viz. Khavda IV-E2 Power Transmission Limited for the Transmission System Project for Evacuation of Power from Potential Renewable Energy Zone in Khavda Area of Gujarat under Phase-IV (7GW) Part E2.
2. POWERGRIDhas signed an MoU with Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPNL) to incorporate a Joint Venture Company for development of intra state transmission system in the state of Rajasthan with an equity participation of 74% by POWERGRID and 26% by RVPNL. The proposed JV company shall undertake projects worth upto Rs 10,000 Cr. in a phased manner.
3. POWERGRIDhas successfully acquired four Special Purpose Vehicles (SPVs) for Inter-state Transmission System (ISTS) Projects. The acquired SPVs—Vataman Transmission Limited, Koppal II Gadag II Transmission Limited, Bikaner III Neemrana Transmission Limited and Neemrana II Barielly Transmission Limited shall facilitate integration of Renewable Energy Zones, immediate power evacuation and establishment of new ISTS transmission infrastructure.
4. The company has also acquired two Project Special Purpose Vehicles (SPVs) viz. Ramgarh II Transmission Limited and Beawar Dausa Transmission Limited for the Transmission System Projects for evacuation of power from REZ in Rajasthan (20GW) under Phase-III, Part C1 and Part H respectively.
5. It has also acquired the Project Special Purpose Vehicle (SPV) - Khetri Narela Transmission Limited. The Transmission project which was established under Build, Own, Operate and Maintain basis would help in evacuation of Renewable power from 8.1 GW Phase-II Solar energy zones in Rajasthan to Delhi, Northern Region of the Country.The project includes 765 kV Gas Insulated Substation (GIS) in Delhi and establishment of 765 kV D/C Transmission lines passing through the states of Rajasthan, Haryana and Delhi with each line having a capacity to transfer about 4000 MW of power.
6. Powergrid has also launched the Virtual Smart Grid Knowledge Center Virtual (SGKC) and Innovation Park virtually.The SGKC has been setup by POWERGRID with support from the MoP and NSGM for the demonstration and advancement of frontier smart grid technologies.Itaims to be one of the leading Centers of Excellence globally to foster innovation, entrepreneurship, and research in smart grid technologies and create capacities in the power distribution sector.
7. The company has also provided Project Management Consulting services for establishment of 132 kV Kole-Gulu-Olwiyo-Nebbi-Arua D/Ckt Transmission line (289 kms) involving river crossing of mighty White Nile having 120 meterstall towers on each bank along with associated four substations at Kole, Gulu, Nebbi and Arua under Grid Expansion & Reinforcement Project (GERP) funded by World Bank. The transmission system integrates West Nile region with Ugandan National Grid shall be contributing towards overall growth.
8. Company also bagged TBCB projects such as Rajasthan REZ Ph-IV (Part-2: 5.5 GW) (Jaisalmer/ Barmer Complex): Part-B, Rajasthan REZ Ph-IV (Part-2: 5.5 GW) (Jaisalmer/ Barmer Complex): Part-D and Fatehpur-Bhadla HVDC: Rajasthan (20 GW) under Phase-III Part-I.
9. Company has also signed an MOU signed with ISRO to create a Spatial Decision Support System for transmission tower management, featuring a geospatial dashboard and tools for disaster analysis, alongside vegetation monitoring along transmission corridors.
10. Company has also developed a Substation Inspection Robot developed in association with IIT Kanpur which has successfully carried out field trial run at Kanpur Substation. The robot facilitates automatic inspection of substation. Markinga significant step towards data driven decision process utilizing AI/ML for efficiency improvement in transmission system operations.
11. It has also bagged a project to establish inter-state transmission system for transmission system strengthening for interconnections of Bhadla-III & Bikaner-III complex on build, own operate and transfer (BOOT) basis.The project comprises 765kV D/C transmission line interconnecting Bhadla-III & Bikaner-III substations and associated bays extension works at these substations in the state of Rajasthan.
12. Company is also setting up a solar generation station at Nagda (in Madhya Pradesh), an 85 Mega Watt solar park and Green Hydrogen plant a on pilot basis at its Nimrana substation.

In last3 Years the stock gave a return of 161.45%as compared to the rise of Sensex and Nifty in the same period.

Power Grid Corporation has planned capital expenditure outlook of Rs 2.07 lakh crore by financial year 2032 and approximately 91% of the projected capital expenditure will be allocated to the transmission business, with the remaining funds reserved for other ventures such as Solar Generation, Smart Metering Infrastructure and Data Centres.It will also include investments for inter-state transmission projects, intra-state transmission projects, cross-border business, international operations, smart metering infrastructure and solar power projects.The company has Rs 1.14 lakh crore of work in hand and it expects to complete projects worth Rs 60,000 crore to Rs 65,000 crore in the next 2.5 years. The company has alsoannounced a capex plan of Rs 18,000 crore for FY 2024-25 and is planning to enhance the annual capex to about Rs 20,000 crores for next two financial years. Along with that the company is also looking to diversify into renewable energy sectorsalong with the setting up of green hydrogen plant. The company is playing a pivotal role in the country’s energy transition journey by large scale integration of renewable energy sources into the National Grid.

India is poised to be a 5 trillion USD economy by the year 2030 driven by Rapid Industrialization, Urbanization, E-mobility etcand it is expected to have 500 GW Installed capacity of non-Fossil along with growing Power requirement of ~125 GW for producing Green H2 under Green Hydrogen Mission. Considering various growth for Power and Energy industry, One Sun One World One Grid aspirations for International Interconnections, growth in Power and Energy storage demand in upcoming years, proven financial track record and ongoing work in hand, investors can invest in this company for long term period.

ANALYST-HET ZAVERI
info@smartinvestment.in

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